With the onset of consumerism in healthcare, health plans must be prepared to make adjustments or modifications to IT systems and business processes to include the oncoming set of rules and regulations.
Back in November 2020, ‘The Departments’ released a set of new requirements under the Transparency of Coverage rules. ‘The Departments’ consist of the Internal Revenue Service; Employee Benefits Security Administration, Department of Labor; Department of the Treasury; Centers for Medicare & Medicaid Services, and the Department of Health and Human Services.
As the name suggests, the objective of the rule is to embed more transparency in the coverage provided by the Health Plan to enrollees. Plans need to be proactive in providing better healthcare “cost-sharing” information to enrollees to help them make informed decisions. The plans must also share the negotiated rates with in-network providers, allowed amount for out-of-network providers on their websites.
The Departments have acknowledged that most of the ”cost-sharing” information to be disclosed in Transparency in Coverage, is already presented to members through the Evidence of Benefits, or the EOB. But this information, in retrospect, limits a member to take informed action on cost-sharing while utilizing the services in the plan.
The Final Rules released have two branches, divided based on who consumes the information. One being the Participants, Beneficiaries, or Enrollees, and the second, the Public.
In this blog, we shall take a look at the requirements for the Participants, Beneficiaries, or Enrollees.
Disclosure Requirements
As mentioned previously, the Final Rules require plans to provide a “cost-sharing” estimate with the enrollees. The cost-sharing applies for a service or item based on the billing code, service description, location of service, in-network & out-of-network provider.
This estimate helps enrollees to compare providers and services based on the location. It also allows them to make decisions based on drug quantity and dosage.
Going by the literature of the rule, the cost-sharing details must be shared with ‘enrollees’. It is required to point out that the term ‘enrollees’ here points to all participants, beneficiaries, or enrollees, and not enrollees alone.
The Final Rule has mandated the disclosure of the following 7 content elements in “cost-sharing”:
- Estimated Cost-sharing Liability: The estimated dollar amount which an enrollee would pay for a covered item under the health plan’s terms, such as deductibles, coinsurance, and copayments.
- Accumulated Accounts: The amount of financial responsibility that an enrollee has incurred at the time of the request, till the current policy year.
- In-network Rate: The negotiated rate or the underlying fee schedule rate, in dollar amount that plans have agreed to pay a provider, for the items and services under coverage.
- Out-of-network Allowed Amounts: The maximum amount a health plan would pay if enrollees decided to avail of a covered item or service from an out-of-network provider.
- Items and Service Content List: The list of each covered item or service when cost-sharing details are sought for a service or an item that falls under bundle payment.
- Notice of Prerequisites to Coverage: Enrollees must be informed that there may be a prerequisite for coverage when they request cost-sharing details of specific covered services.
- Disclosure Notice: A “plain language” notice must be shared with the enrollees to reveal disclaimers on balance billing, the difference in estimated and actual amount, and the lack of coverage guarantee for covered services.
As detailed in the Rules document at the Federal Register, plans must initially provide the details for 500 pre-defined items.
The deadline to be compliant with this rule is January 1, 2023, and by January 1, 2024, plans need to provide pricing information regarding “all items and services” for policy years. The Departments went on to clarify that the covered items and services must include covered prescription drugs and durable medical equipment.
Apart from the above-mandated requirements, the Departments urge organizations to come up with their innovative baseline standards for cost-sharing. These could include any information or metric that would add value to the member while making care decisions.
Now that the content elements have been discussed, let’s look at how the cost-sharing details must be disclosed to enrollees.
- Internet-based Self-service Tool: Enrollees should have access to real-time responses on “cost-sharing” queries on an “internet website” which provides cost-sharing details for covered services, in-network provider details, out-of-network allowed amounts for certain services, etc.
- Paper form: Plans must mail all the mandated cost-sharing details, without a fee, for specific services via USPS or other delivery systems no later than 2 business days, if and when requested by an enrollee via phone, mail, or, any other medium.
A key point to be kept in mind is that the usage of the terms ‘plans’ in the Final Rule encompasses health plans or issuers.
It is not enough that the above-mentioned mandates alone are implemented. Keep an eye on this space to know about the disclosure requirements to the public, under Transparency in Coverage.
In Conclusion
Health insurance organizations must implement these rules as soon as possible to move towards an efficient and proactive eco-system. Apart from sharing information that would help consumers make informed care decisions, it would also improve the quality of care and outcomes.
Connect with a healthcare expert at Nalashaa to speak about the Transparency in Coverage Rule and its impact on health plans, business processes, and IT infrastructure. Reach out to us at info@nalashaa.com
Pankaj Kundu
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